Traders Buy Large Volume of XP Call Options (NASDAQ:XP)

Key Points

• XP call-option activity surged on Friday, with 127,449 calls traded—about 1,039% above the typical daily volume of 11,185.
• XP reported quarterly EPS of $0.53, beating estimates by $0.03, while revenue of $943.55 million exceeded forecasts and rose 8.3% year over year.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and a $23.50 target price; institutional investors own 59.15% of the stock.

XP Inc. (NASDAQ:XP - Get Free Report) was the recipient of unusually large options trading on Friday. Stock traders bought 127,449 call options on the company. This represents an increase of approximately 1,039% compared to the typical daily volume of 11,185 call options.

XP Stock Performance

Shares of XP opened at $21.50 on Friday. The company has a market capitalization of $11.55 billion, a PE ratio of 11.26, a price-to-earnings-growth ratio of 0.57 and a beta of 1.01. The company has a debt-to-equity ratio of 0.07, a current ratio of 4.80 and a quick ratio of 4.80. XP has a one year low of $14.80 and a one year high of $23.13. The company's fifty day moving average price is $18.37 and its 200 day moving average price is $17.90.

XP (NASDAQ:XP - Get Free Report) last released its quarterly earnings results on Monday, August 17th. The company reported $0.53 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.50 by $0.03. The company had revenue of $943.55 million during the quarter, compared to analysts' expectations of $935.15 million. XP had a net margin of 27.20% and a return on equity of 22.19%. The business's quarterly revenue was up 8.3% compared to the same quarter last year. During the same period in the prior year, the company earned $2.46 earnings per share. As a group, analysts expect that XP will post 2.09 earnings per share for the current year.

Wall Street Analysts Forecast Growth

A number of research firms have recently weighed in on XP. Citigroup raised their price target on shares of XP from $23.00 to $25.00 and gave the company a "buy" rating in a report on Tuesday. Weiss Ratings raised shares of XP from a "hold (c-)" rating to a "hold (c)" rating in a research report on Wednesday, September 2nd. Finally, Itau BBA Securities upgraded XP from a "market perform" rating to an "outperform" rating and set a $22.00 target price on the stock in a report on Monday, August 31st. Four research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $23.50.

Insiders Place Their Bets

In related news, Director Bruno Constantino Alexandre dos Santos sold 123,257 shares of the firm's stock in a transaction that occurred on Wednesday, September 16th. The shares were sold at an average price of $19.58, for a total transaction of $2,413,372.06. Following the transaction, the director owned 1,500,000 shares of the company's stock, valued at approximately $29,370,000. This trade represents a 7.59% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in XP. ARGA Investment Management LP boosted its position in shares of XP by 4.0% in the first quarter. ARGA Investment Management LP now owns 20,699,135 shares of the company's stock valued at $394,112,000 after acquiring an additional 799,048 shares during the period. Arrowstreet Capital Limited Partnership increased its position in XP by 10.9% during the fourth quarter. Arrowstreet Capital Limited Partnership now owns 11,799,175 shares of the company's stock worth $193,152,000 after acquiring an additional 1,160,977 shares during the period. Bank of America Corp DE increased its position in XP by 33.4% during the first quarter. Bank of America Corp DE now owns 5,147,245 shares of the company's stock worth $98,004,000 after acquiring an additional 1,289,393 shares during the period. Norges Bank acquired a new position in XP during the 4th quarter valued at $80,196,000. Finally, Geode Capital Management LLC raised its stake in XP by 4.4% during the 4th quarter. Geode Capital Management LLC now owns 4,866,728 shares of the company's stock valued at $79,285,000 after purchasing an additional 204,524 shares during the last quarter. 59.15% of the stock is owned by institutional investors.

About XP

XP Inc is a Brazil-based financial services platform that provides investment, banking and related financial products to individuals, businesses and institutional clients. Through its digital platforms and network of financial professionals, the company offers access to investments such as stocks, bonds, mutual funds, exchange-traded funds, real estate funds, retirement products and insurance.

The company operates a portfolio of brands that includes XP, Rico and Clear, serving customers with different investment needs and levels of experience.

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